Government of Bermuda responds to EU Commission statement

By IFC Media added on 19/06/2015

Minister of Finance The Honourable E.T. Bob Richards said the European Commission published black-list, as part of an action plan to crack down on multi-national companies trying to avoid paying tax, is unjustified and baseless:


“The criterion for inclusion was if 10 or more EU member states had listed a country on their national black-list. 11 EU Member States have Bermuda on their national black-list.


“Bermuda has signed a large number of tax information exchange agreements with countries around the world and today has 80 treaty partners because of signing the Multilateral Tax Convention (a multilateral TIEA).


“Those 80 partners include all G20 countries, all OECD countries except for one, and all EU countries except for two because those three countries have not yet signed the international standard on tax matters, the Multilateral Convention.


“Minister Richards added, “But at least five of those 11 EU member states that have us on their national blacklist have not performed their obligations in one way or the other. Two of the five were to give beneficial recognition to the Multilateral Tax Convention in their blacklist criteria, one is still in the process of considering recognition of the Multilateral Convention, one has not kept their promise to send Bermuda documents to sign to take us off their list, one which is one of the two EU member states I earlier mentioned has not even signed up to the Multilateral Tax Convention, and one  publically announced earlier this year that it had taken Bermuda off its blacklist.


“We have been waiting for their cooperation. It is surprising then that we would be labelled as “uncooperative”.


“A closer scrutiny of this latest development reveals something wrong with this process.


“To be included on this new “uncooperative” list, one would have to be “black-listed” by 10 or more EU member states, not 9,8, 7or 6. Why did they use 10 speaks to lack of transparency.  Not all EU members agree on how they compile their blacklists.


“Some are based on a combination of tax transparency concerns and low tax rates; others are triggered by low tax rates alone, and some are triggered by a lack of a tax information exchange agreement.


“Domestic tax policy is recognised by the UN, WTO, IMF the OECD and the G20 as a jurisdiction's sovereign right to implement. Any national list whose trigger includes low or no income tax should be disqualified.


“If there had been consultation we would have had the opportunity to point out that at least five of the 11 countries named as black-listing Bermuda had either not performed their obligation required to consummate a tax information exchange agreement with Bermuda or had failed to keep their promise made to Bermuda to amend their legislation to remove us from their black-list.


“Bermuda prides itself in being a highly cooperative business centre and has gone the extra mile to be ahead of the curve in this respect.”